Market Alert - Pre-Market

Futures vs FV: SP -25.31, -216.79, NASDAQ -76.12

Trumpedo? Looking at the markets they are not down much at all compared to when the early results came in. More like the Brexit: lots of doom and gloom, but not really much of an impact.

From down almost 1,000 Dow points to down 200 Dow points. NASDAQ down 200 points to -74 points -- a walk in the park given the cataclysmic upheaval of the status quo from polls that were off (not IBD/Tipps -- again), reporting that was questionable, to policies that will surely be overturned (e.g. ACA).

Indeed, futures are slowly working up to the open. Financials are up, biotechs are up, metals are up. It would appear that the prospect of growth policies are not so repugnant to the markets. Moving away from stimulus dominated from Fed action to stimulus dominated from fiscal and other policy is something only the Fed won't like.

In short, it looks as if, holy cow, the market could close the day even or even better? Who would have thought that outcome with the election outcome just yesterday early evening?

Oil: API reported a smaller oil build, another gasoline loss. +4.4M vs +9.3M bbl prior. Gasoline -3.6M bbl vs -3.6M bbl prior

Earnings beats: WEN
Misses: TRIP; VIAB (TL)

China CPI: -0.1% vs 0.7% prior. Year/year: 2.1% vs 1.9%

Mortgage applications: -1.2% as mortgage rates rise.


OTHER MARKETS
Bonds: 1.957% vs 1.867%

EUR/USD: 1.1032 vs 1.1015

USD/JPY: 103.72 vs 105.17

Oil: 44.81, -0.17

GOLD: 1302.60, +28.10


We will have to see how the early losses react. Are they pared even more as the bell rings or is the pre-market another head fake? From -1000 to -200ish would appear to belie a reversal back downside.

We were hoping for 1,000 down to open. We would have sold our downside at the open and started buying. Now we will see where we can take some gain on the downside, i.e. if the rise to the open reverses we can let them run a bit. If the pre-market build continues we will look at taking them off and looking at the upside, though not as much an all-in as if the market was limit down given the market still has that top it built BEFORE the past two weeks of 'interesting' pre-election movement.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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